What happens to the demand for loans when the interest rate is very high?
The Loanable Funds Market and Crowding Out- Macro Topic 4.7

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Business
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11th Grade - University
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Hard
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5 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Demand remains unchanged.
Demand fluctuates randomly.
Demand decreases significantly.
Demand increases significantly.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How does the government cover the difference when its expenditures exceed its tax revenue?
By borrowing in the loanable funds market.
By reducing public services.
By increasing taxes.
By printing more money.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the effect of increased government borrowing on the real interest rate?
It increases the real interest rate.
It decreases the real interest rate.
It has no effect on the real interest rate.
It stabilizes the real interest rate.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the term used to describe the reduction in private investment due to increased government borrowing?
Deflation
Inflation
Stagflation
Crowding out
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why might a government choose to run a deficit during a recession?
To reduce inflation.
To decrease the national debt.
To close a recessionary gap through fiscal policy.
To increase public savings.
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